Legal & General Share Discussion Threads

[tornado12] 14/11/2024 08:56

Clear we are all Saint investors in UK as we have been patiently waiting for the last 5 yrs for consistent growth 🤣🤣

[cyberian] 14/11/2024 08:52

I personally thought that Aviva 3Q and very positive forward statement would have resulted in an improvement and share price bounce here but just need to be patient I guess.

[tornado12] 14/11/2024 07:41

Just hope our CEO is looking over at Aviva trading update. Very impressive numbers YoY.. convinced we can also do it at LGEN

[keyno] 13/11/2024 23:16

That's the least of their considerations, Alp. Downticking appears to be a hobby of theirs and an obsessive one at that.

[alphorn] 13/11/2024 21:40

The blue poster down ticking all posts should not be invested in LGen as they patently do not understand the sector.

[blueclyde] 13/11/2024 18:54

This is nonsense about the gilt example you just gave. You buy 100000 of gilts. The 50 year gilt is something like 4.5 percent interest. So it pays you 4500 a year. You die. Your family get the 100000 left in the gilt. Or. You buy an annuity. You hand over 100000. You get 6.8 percent interest or 6800 per year but only if you are 65 or above. You die. The 100000 is gone. Is anyone bright enough to see how much money you are giving them to hedge?

[mcunliffe1] 13/11/2024 18:47

thanks drectly - I can see your point now. Not long-winded explanation, just a clear one. Appreciated.

[alphorn] 13/11/2024 18:32

De-risking is all fine so long as the counterparty remains solvent on any big market moves.

[alphorn] 13/11/2024 18:30

I did not know about the weight loss drugs not yet being factored in. However, life expectancy across the UK has fallen to its lowest level in a decade, mainly owing to the impact of the coronavirus pandemic. So impacts both ways.

[blueclyde] 13/11/2024 18:30

https://www.legalandgeneral.com/institutional/pensL&G have a huge business line where they specialise in de risking longevity from pension schemes. The analogy is spread betters. The markets go up every single year just about, but they constantly make money. Why because they hedge and can extracted big fees from the risk.

[alphorn] 13/11/2024 18:24

Wc - absolutely correct.
The actuarial liability will determine whether assets can be freed or need topping up. That can be magnified by the changes in inflation for the pensions themselves and interest rates.
Just imagine the magnification from these huge pension buy-outs. Refer my earlier posts on the subject of risk for the Insurer. Insuring is a risky business! Hence you need a big yield. ;)

[action] 13/11/2024 17:56

Missed the dip at 213p. May look at again tomorrow..

[drectly] 13/11/2024 17:46

The annuity rate is higher than the gilt yield (or you would just buy a gilt and leave the gilt in your will). The extra amount and lengh paid determine who gains most, LGEN in this case or the person with an annuity. Based on present life expectancy, LGEN make a reasonable gain on the average of all policies. The point made above is if due to advances there is a sudden increase in average life expectancy LGEN are on the hook to loose out. In the same way if things turn in the wrong direction regards life expectancy, LGEN would gin with annuities written. Apology for a long statement of the obvious.

[williamcooper104] 13/11/2024 17:43

There absolutely is longivity risk - go check out the solvency capital sensitivities They always pay higher annuity rates than underlying gilts/credit assets The impact of longevity is magnified by what rates are as in if people live longer and the insurer can reinvest at higher yields then it's less of a problem; but if we go to a lower yield world then it's much worse Was chatting to an actuary at a reinsurer about lobgticiy - and they're not pricing in anything for Ozempric yet

[kernelthread] 13/11/2024 17:35

Who's to say these wonderful new weight loss drugs won't have deleterious side effects? I've already seen one article which implicates them in higher rates of blindness caused by ischaemic optic nerve neuropathy.

[mcunliffe1] 13/11/2024 17:25

But, I suppose if the annuity receiver croaks early the protective asset can then be freed-up (sold?).

[blueclyde] 13/11/2024 17:23

Correct me if I am wrong but there is no longevity risk. The liability is matched with an asset, the asset is only removed once the liability has passed. It's like right now annuities are based on gilt rates because they buy gilts against the annuities and it's all hedged.

[kirkie001] 13/11/2024 17:08

Reddirish - that's generally not the way that massive longevity improvements feed through into life expectancy.

You cure cancer? Awesome. People new don't die of cancer. But they don't live another 10 years... they live another 6 months until the next thing kills them.

(Exaggerated for effect - but it's the way the longevity calcs work). So it takes multiple "miracle drugs" to have a huge impact. One is generally speaking within reserving parameters.

[yf23_1] 13/11/2024 15:55

Don't forget the existential threat of 5yrs of Starmer's dictatorship will lead to depression and a lack of the will to live.

[mcunliffe1] 13/11/2024 15:09

A thought provoking post there reddirish. Not to be dismissed lightly. Thanks.

[reddirish] 13/11/2024 15:03

I used to have LGEN as my largest income holding across three portfolios, but have sold down (now to a nominal amount in one account, to keep an eye on it) because of longevity risk. Ignoring all tech bros getting blood transfusions from their sons, there is an (admittedly very small) risk that the current research into the benefits of Ozempic and all the other diabetes drugs on healthy life span will bear fruit. Wonderful news for my kids, who could get an extra 10-15 years of healthy late adulthood (a bit late for me), but devastating for pension liabilities. Admittedly, an outlier risk, but until the research findings - and there is a lot going on- say no, I'll be stayng clear of all the life insurers .

[uhound] 13/11/2024 14:54

Stock will be bought for income which looks very safe.

One to continue to add to even if it falls further while under 200 day MA.

[action] 13/11/2024 14:38

Divi will be maintained. But share pe is high..